Internet-connected devices are on the rise, and the impacts are being felt across every industry. To what extent might the Internet of Things (IoT) affect hotel operations, enhancing both the guest experience and operational efficiency? Doug Carrillo, VP of sales & marketing at Virgin Hotels, and Guillaume Bazin, VP of digital operations mobile at AccorHotels, talk through the possibilities with Abi Millar.
Since the term was first coined in 1999, Internet of Things (IoT) has been touted as the next big thing, generating hype and misgivings in equal measure. Referring to connected, ‘smart’ appliances, its applications range from intelligent shopping systems to app-based crop monitoring.
Perhaps the classic example would be the internet-connected fridge, a staple of early 2000s sci-fi films. The idea is that you can keep track of what’s inside, even ordering a replacement carton of milk once it starts to go bad.
While such fridges remain a niche (and often criticised) appliance, IoT itself is no longer a futuristic-sounding phrase. According to IT research firm Gartner, there were 6.4bn connected ‘things’ by the end of 2016, with that number set to surge to 20.8bn by 2020.
As more devices get connected, the implications will likely be profound. Although typically discussed in terms of consumer technologies (think Fitbit activity trackers and the quantified self), every industry will feel the impacts.
GE has gone so far as to call the Industrial Internet of Things the ‘Third Wave of Innovation’, following on from the industrial and internet revolutions. It argues that ‘the deeper meshing of the digital world with the world of machines holds the potential to bring about profound transformation to global industry and in turn to many aspects of daily life’.
Hospitality is no exception. According to a study by Tata Consultancy Services, companies in the travel, transportation and hospitality industry spent an average of $128.9 million on IoT initiatives in 2015, the highest figure of any sector. A PwC report, meanwhile, states that hospitality is the industry with the fifth highest investment in sensors.
“Everyone is trying to figure out how IoT applies in the hotel space. Our point of view is if it’s not additive to the hotel guest experience then what’s the point. That’s why we call it ‘smart disruption’ at Virgin Hotels, not just ‘disruption’,” says Doug Carrillo, VP of sales & marketing at Virgin Hotels.
Carrillo’s take on the matter – that there is no point blindly implementing IoT technologies for the sake of it – is perhaps indicative of the stage of maturity these technologies have reached. While the industry is moving in this direction, it’s still early days, and hoteliers are trying to work out how best to derive value from their investments. As a result, many discussions on the subject focus more on the near future than they do the present day.
“At AccorHotels, we believe that the IoT, and more generally the use of AI, will help us to accompany tomorrow’s uses and habits in the travel sector. Our teams are working on all aspects of our customers’ stay and future experiences,” says Guillaume Bazin, VP of digital operations mobile at AccorHotels.
He adds that while AccorHotels has started work on various IoT applications, it does not yet use the technologies for customer data collection or internal processes. Carrillo is similarly keen to downplay its current importance, arguing that IoT is only important to the extent that the guest feels it improves their experience.
“So much of IoT is being driven by at home experiences, we just need to see how that translates into the hotel space,” he says.
Make it personal
So what might IoT actually mean for the hotel industry – both over the next few years and further ahead? One use that’s widespread already is room control, in other words allowing guests to control temperature, lighting, curtains, etcetera from an in-room iPad or television. This interface might also be used to communicate with housekeeping, or to connect with a ‘home away from home’ network that can stream films or music.
Some hotels, like MGM Resorts City Center hotels in Las Vegas, have been incorporating ‘smart tablets’ since as early as 2009. AccorHotels began rolling out Samsung’s SMART Hospitality Display portfolio in 2015, and Virgin Hotels’ mobile app, Lucy, fulfills a similar function. Still other hotels are experimenting with voice communication, such as Amazon’s Alexa.
“Lucy allows guests to integrate their device into the hotel experience,” explains Carrillo. “She gives users a seamless and customised stay by transforming their digital ecosystem into a personal hotel assistant – fulfilling requests for services and amenities, functioning as the room thermostat, streaming personal content and more.”
Another common application is keyless entry, which enables people to enter their hotel room by holding their smartphone to a sensor. Starwood began rolling out SPG Keyless in 2014, while Hilton offers the service to all its Hilton Honors customers. This functionality is widely seen as a sign of things to come.
Moving beyond guest-oriented applications, IoT is also linked to the concept of the ‘smart hotel’. Guestroom automation forms a part of that – for instance, lights that automatically turn on once the door is opened, or automated climate control systems that can detect whether someone’s in the room.
Notably, Starwood has used a technique called ‘daylight harvesting’, which adjusts the lighting based on how much sunlight is filtering in from outside. Through technologies of this kind – along with systems that monitor guests’ energy and water usage – IoT will have big role to play in hotels’ future sustainability efforts.
On top of this, any smart hotel worthy of the term is likely to involve a level of predictive maintenance. In essence, properties will be kitted out with sensors that can detect anomalies and send an alert to the hotel staff if something’s wrong. It will no longer fall to the guest to complain about the water leak or malfunctioning air con.
However, the most hyped application for IoT has to do with personalisation. At a time when the big chains are often seen as loyalty reward programmes first and foremost, the guest experience is the thing that makes or breaks that loyalty. If a hotel can deliver a truly personalised service – tailoring its offering to each person, in accordance with their preferences – then guests are far more likely to remember their stay.
“In a near future, we could imagine using these new technologies to conceive an even more extraordinary journey for our customers,” says Bazin. “Let’s imagine a personal assistant that could assist our clients from their app by booking a taxi to the airport, accompanying them when they arrive at the hotel, proposing personal activities, booking their favorite restaurant in advance and pointing out the best places to visit. That would sure make for an extraordinary experience for each and every one of our clients!”
AccorHotels is currently developing a chatbot named Phil Welcome, which is designed for precisely this purpose. Already live on Facebook Messenger and Google Home, and soon to be available on the hotel group’s website and app, this AI will be able to propose a series of services to the client and answer their questions.
The more far-reaching vision, however, involves ‘smart interactions’ at every point in the guest journey, guided by sensors and beacons. After checking in via their app, guests could tweak their preference settings and would find their hotel room already adjusted to their comfort levels. As they moved through the property, they would receive location-sensitive alerts and suggestions, and could order, say, drinks by the pool with a swipe of their phone.
In theory, the more information a customer gives the hotel, the easier it should be to predict their future preferences. If IoT technologies are harnessed for data collection, together with sophisticated analytics, the platform could be used to build a profile of each guest and to pre-empt their wishes ahead of time. Most people are already familiar with this concept from online retail and targeted advertising.
“All businesses are chasing what personalisation really means to the consumer,” says Carrillo. “We feel that we need to look outside our industry to understand the direction Virgin Hotels needs to take consumer data and personalisation via IoT, and we are on that path right now.”
Of course, these are still emerging technologies, and hotels will need to tease out what level of implementation is most appropriate. After all, if customers find their app’s suggestions intrusive rather than helpful, the technologies won’t be a desirable investment.
“Several teams at AccorHotels are working on all questions related to customers’ data protection and the IoT. Our customers and the protection of their personal data take absolute precedence over everything else,” says Bazin.
On top of that, devices may be vulnerable to hackers, and it can be costly to retrofit hotels with IoT connectivity. C Scott Hansen, director of guest technology at Marriott, has stressed these challenges, adding “I don’t see significant impact in just the next five years”.
All this said, hotel groups remain optimistic about the possibilities in store, realising that in the medium to longer term, IoT has scope to affect almost every aspect of their business.
“We share the same concerns as most industries that incorporate IoT into their consumer-facing experiences and operations,” says Carrillo. “So much of it is documented but some of it is evolving. It’s all about having the right team – internal and consultants – that are diligent with these concerns. We never stop evolving, so that what we offer is not only disruptive but revolutionary.”
This article appears in the Winter 2017 edition of Hotel Management International